Feds: Oil from Dakota fields improperly classified

Government investigators have found crude oil being transported from North Dakota's Bakken region was misclassified in samples taken from 11 out of 18 truck shipments en route to rail loading stations, federal transportation officials said Tuesday. (Thinkstock Image)

Government investigators have found crude oil being transported from North Dakota's Bakken region was misclassified in samples taken from 11 out of 18 truck shipments en route to rail loading stations, federal transportation officials said Tuesday.

Hazardous materials shipments are supposed to be classified into one of nine categories depending on the risk involved. If the materials are misclassified, they could wind up being shipped in less protective rail tank cars and emergency personnel might follow the wrong protocols when responding to a spill.

The Pipeline and Hazardous Materials Safety Administration said it has proposed fining three companies involved in the shipments — Hess Corp., Whiting Oil and Gas Corp., and Marathon Oil Co. — a total of $93,000.

"The fines we are proposing today should send a message to everyone involved in the shipment of crude oil: You must test and classify this material properly if you want to use our transportation system to ship it," Transportation Secretary Anthony Foxx said in a statement.

A runaway train with 72 tank cars of Bakken oil derailed, exploded and burned in the downtown area of Lac-Megantic, Quebec, near the Maine border in July. Forty-seven people were killed and 30 buildings destroyed.

The accident was a wake-up call for safety officials, who were surprised by its severity. Tests taken of Bakken oil since the Lac-Megantic accident shows it is more dangerous than some other types of crude. The oil in the train that derailed in Lac-Megantic was misclassified as "packing group III," which the safety administration equates to minor danger.

Some of the recently tested oil was classified as "packing group II" when it should have been "packing group I," the most dangerous category, while other truckloads were classified as packing group III when they should have been classified as packing group II, federal officials said. Regulations require shippers have a security plan in place for packing groups I and II, but not packing group III.

U.S. crude oil production is forecast to reach 8.5 million barrels per day by the end of 2014 — up from 5 million barrels per day in 2008. The increase is overwhelmingly due to the fracking boom in North Dakota's Bakken region. Fracking involves the fracturing of rock with pressurized liquid to free oil and natural gas unreachable through conventional drilling.

Freight railroads in the U.S. transported nearly 234,000 carloads of crude oil in 2012, up from just 9,500 in 2008. Early data suggest that rail carloads of crude surpassed 400,000 in 2013, according to the Association of American Railroads.

Last month, U.S. and Canadian accident investigators warned that a "major loss of life" could result from an accident involving the increasing use of trains to transport large amounts of crude oil. They urged their governments to make stronger efforts to ensure hazardous cargo is properly classified before shipment. They also recommended that trains carrying hazardous materials avoid populated and other sensitive areas, and greater oversight to ensure rail carriers that transport oil are capable of responding to "worst-case discharges of the entire quantity of product carried on a train."